Interview with: Marvin P. Loeb, Sc.D., Chairman, CEO and Chairman of the Board of Cardiodyne Inc. - featuring: their medical lasers and patented disposable and reusable fiber optic devices for use in minimally invasive procedures as alternatives to surgery.

Trimedyne, Inc. (TMED.OB-OTC: BB)

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Trimedyne’s ability to obtain large, powerful marketing partners, its new side firing Laser Fiber for the outpatient treatment of enlarged prostates and the success rates of its side firing Laser Needle in the outpatient treatment of herniated or ruptured spinal discs will give it  an edge in dominating the $720 million market for treating enlarged prostates and the $600 million market for treating damaged discs in   the spine



Healthcare
Medical Appliances & Equipment
(TMED.OB-OTC: BB)

Trimedyne, Inc.

25091 Commerce Centre Drive
Lake Forest, CA 92630
Phone: 949-951-3800



Marvin P. Loeb, Sc.D.
Chairman, CEO and Chairman
of the Board of Cardiodyne Inc.

Interview conducted by:
Walter Banks, Publisher
CEOCFOinterviews.com
October 26, 2006

BIO:
Marvin P. Loeb, Sc.D.
Chairman and CEO of Trimedyne, Inc. and Chairman of Cardiomedics, Inc.
Marvin Loeb is an experienced entrepreneur in the health care field. Over a period of thirty years, he founded 27 companies, of which he took 15 public by IPO (most of which have been sold to or merged with larger companies), 6 of the privately held companies were sold to larger companies without going through an IPO, four failed and two are still privately held. He was awarded an honorary Doctor of Science degree and has been issued 40 U.S. Patents, with an additional 8 patent applications pending.

COMPANY PROFILE:
Trimedyne develops, manufactures and markets medical lasers and patented disposable and reusable fiber optic devices for use in minimally invasive procedures as alternatives to surgery. Trimedyne’s laser procedures, most of which are performed on an outpatient basis, have higher success rates than surgery and avoid most of the adverse effects and complications of surgery.

Trimedyne’s new side firing laser fiber was recently cleared for sale by the FDA for the treatment of enlarged prostates, a condition which affects about 50% of men over age 55. This new device will be marketed in the U.S. and Japan by Boston Scientific Corporation (NYSE:BSX) and by Lumenis, Ltd. (LUME.PK) elsewhere throughout the world, starting late in the first calendar quarter of 2007. Lumenis is a medical laser manufacturer based in Israel with sales of $200 million. Trimedyne’s lasers and fiber optic devices are also used in orthopedics for the outpatient treatment of herniated or ruptured discs in the spine and the treatment of damage in joints, in urology for fragmenting stones in the kidney and bladder, and for a variety of other uses.

CEOCFO: With us today is Dr. Marvin P. Loeb, the founder and Chairman of Trimedyne, Inc., a manufacturer of medical lasers and fiber-optic disposable devices. Trimedyne’s symbol is TMED.OB.”

CEOCFO: Dr. Loeb, why should people invest in Trimedyne?
Dr. Loeb: “First of all, we’ve shown that we can operate profitably. Most importantly we’ve developed a new disposable, side firing laser fiber for treating enlarged prostates in men that will be marketed by Boston Scientific Corporation (NYSE: BSX) in the United States and Japan and by Lumenis, Ltd. (LUME.PK) throughout the rest of the world. Lumenis, which is based in Israel, is the world’s largest manufacturer of medical lasers, with sales of about $200 million.

Trimedyne also manufactures lasers and unique, patented, disposable laser fibers and needles used in minimally invasive procedures to treat herniated or ruptured discs in the spine in 20-30 minute outpatient procedures, to treat damage in joints, such as the knee, shoulder, elbow, ankle and wrist, to fragment stones in the kidney and bladder, and to treat a variety of other conditions.

Our lasers and fibers are alternatives to surgery, significantly reducing the cost and complications of surgery. All of our lasers and fibers have been cleared for sale by the FDA and are covered by Medicare and most insurance plans.”

CEOCFO: Tell us about your new marketing alliance and the market for your new prostate device.
Dr. Loeb: “Our new laser fiber will be used for the outpatient treatment of enlarged prostates, which affect about 50% of men over age 55. As men age, the prostate grows and blocks urine flow. While millions of men take drugs to treat an enlarged prostate, the drugs lose their effect over time. About 200,000 electro-surgical procedures using radiofrequency (RF) energy are performed each year in the United States to treat enlarged prostates when the drugs no longer work, and about 1 million are performed each year outside the United States.

Our new laser fiber will be marketed in the U.S. and Japan by Boston Scientific and by Lumenis in other countries throughout the world. Boston Scientific has one of the largest sales forces in the urology field in the U.S. and Japan, and Lumenis has a large sales force in Europe and most of Asia, including India and China.

Boston Scientific is conducting a quality review of our manufacturing process and quality standards. We expect this will be completed and shipments of the new laser fiber to Boston Scientific and Lumenis will begin late in the first calendar quarter of 2007.

Boston Scientific will conduct training courses for urologists on our new fiber at a number of institutions in the U.S. and Japan, and Lumenis will conduct training courses in the major population centers in countries outside the U.S. and Japan.

Our new, side firing laser fiber is similar to the side firing needles we manufacture for treating herniated or ruptured discs in the spine, so production is not a problem, and our laser procedure is similar to the electro-surgical procedure to treat an enlarged prostate, so training of physicians will not cause a significant delay in the adoption of our device by urologists.”

CEOCFO: Who will ultimately be the leader in this market?
Dr. Loeb: “Presently, about 25% of the procedures for treating enlarged prostates in the United States are performed with a laser and 75% are done an electro-surgical device using radio frequency (RF) energy, and RF energy is used in about 95% of the cases done outside of the United States.

In the electro-surgical procedure, a wire loop, inserted through an endoscope in the penis, is heated red-hot, like a wire in a toaster, and is moved back and forth to carve out the center of the prostate permitting urine to flow.

The electro-surgical procedure entails a one or two day hospital stay, up to a week or more of recuperation, significant bleeding (up to 10% of the patients require a blood transfusion), up to 15% of the men who were potent before the procedure become impotent, and up to 10% become permanently incontinent.  Our laser procedure is outpatient, is virtually bloodless and largely avoids all of these adverse effects, so competing with a 60 year old, traumatic surgical procedure will be easy.

Most importantly, we and Lumenis have sold about 3,000 high power Holmium lasers to hospitals, surgery centers and laser rental companies around the world for use in lithotripsy and orthopedics, about 75% of which are in the U.S.   We can sell our new laser fiber for treating enlarged prostates to these laser owners, without their having to buy a new laser.  Laserscope has sold about 600 of their lasers worldwide, which use their laser fiber, so we have five times the installed base of lasers to whom we can sell our fibers.

We anticipate that with Boston Scientific and Lumenis marketing our new fiber, we will become the worldwide leader in this market within a few years.”

CEOCFO: Will this marketing alliance generate significant sales for Trimedyne in 2007?
Dr. Loeb: “We anticipate that it will. First, we are not starting from scratch.  Boston Scientific and Lumenis have been marketing a different side firing fiber for about a year and a half.  However, their current fiber is not as fast in vaporizing tissue as ours, and it is less durable.

According to laboratory testing on animal soft tissue and comparative data, our new side firing laser fiber is faster at vaporizing tissue than any other laser fiber on the market.  This means the physician is out of the operating room faster and can get back to his office, with a waiting room full of patients.

In addition, our fiber is more durable, which means the hospital doesn’t have to stop in the middle of the case, take another $600 laser fiber out of inventory and place it back into the patient, which wastes time and costs money.  Hospitals are paid the same, regardless of how much operating time is used and whether they have to use one or two $600 fibers to finish the case. Both hospitals and doctors will love this new procedures.”

CEOCFO: Tell us about your laser treatment for herniated or ruptured discs, and how it compares to surgery.
Dr. Loeb: “Disc surgery is a bad procedure.  It entails a 2-4 day hospital stay, significant bleeding, one to two weeks of significant pain, a recuperation period of a month or two and up to 6 months of physical therapy.   The success rate is only about 40 to 70%, based upon published papers in medical journals, while our success rate ranges from 85 to 95%, again based on published papers in medical journals.

A herniated disc has a bulge that presses against the nerves in the spine, causing constant pain.  If the bulge ruptures, the extruded material presses against the nerves in the spine, also causing constant pain.

Our side firing laser needle is only 1/12th of an inch in diameter and is inserted into the disc under x-ray guidance.  Our laser, which is called a Holmium laser, after the rare element that is used to generate that wavelength, is emitted to vaporize a portion of a herniated disc, relieving the pressure on the nerves. If the bulge has ruptured, the needle is inserted through an endoscope, and the extruded material is vaporized under direct vision, again relieving the pressure on the nerves.

The patient walks out about an hour after the 20 to 30 minute outpatient procedure with a band-aid on the puncture, no stitches, and can return to light activities in a few days. This is remarkable compared to the existing surgery.”

CEOCFO: How large is the spinal market?
Dr. Loeb: “About 600,000 patients undergo surgery each year in the United States for a herniated or ruptured disc, and about 400,000 are treated overseas, for a total of about 1,000,000 cases. At $600 per laser needle, that’s a $600 million market. The market is almost the size of the $720 million market for treating an enlarged prostate, but there is a problem we face in the adoption of our laser procedures to treat spinal discs.

While urologists are trained to perform endoscopic procedures, spinal surgeons are not accustomed to performing procedures through an endoscope, watching a video monitor.  They have to spend 3 to 4 days in a workshop to learn the procedure, doing it on cadavers.

Convincing busy spinal surgeons to take 3 or 4 days away from their practice to attend a training course is difficult, because the demands on their time are significant. Spinal surgeons have been spoiled by companies like Stryker, Medtronic and J&J, who take them to training courses in Bermuda or Hawaii, pay their expenses and entertain them royally to get them to use their surgical devices. As a result, we have to do the same.

There is a lot of room to grow in the spinal market, because currently our laser procedure is only a small percentage of the total number of cases. However, it is expensive to train the surgeons, and it is a slow process. Our job is to expand our spinal business by training more surgeons, and we need to educate the public on the higher success rate of our laser procedure, so they will ask the surgeon for it.

We plan to use some of the profits form our increased volume of business from Boston Scientific and Lumenis to conduct more training courses and expand our spinal disc market.”

CEOCFO: What sales and profits are you forecasting?
Dr. Loeb: “It is difficult to make forecasts until we have 2 or 3 quarters of experience with Boston Scientific and Lumenis marketing our new fiber, which is not expected to begin until late in the first calendar quarter of 2007.   As a result, we will have only two quarters of sales of the new fiber in our current fiscal year, which ends on September 30, 2007.

Investors can access our financials, which show that we made a profit of about $1 million in ‘03 and another million in ‘04. We made a profit of only about $200 thousand in ‘05, because we invested heavily in the development of this new product and taking it through the FDA.

Over a period of 2-3 years, we believe a 50% penetration of the $120 million U.S. enlarged prostate market can be achieved by Boston Scientific and a 10 to 20% penetration of the $600 million foreign market for treating enlarged prostates can be achieved by Lumenis. We also believe a 10 to 20% penetration of the $600 million market to treat spinal discs is possible in a few years, but as I said, this will take a considerable amount of surgeon training and time.

However, as hospitals buy our Holmium lasers to treat enlarged prostates, we can recommend their use in discs and for their other uses, because it is a very versatile laser.”

CEOCFO: What other new products are in development?
Dr. Loeb: “We are developing another new, side firing laser device to treat female urinary incontinence. This device is designed to shrink and tighten the urethra. It is expected to be a 5-minute outpatient procedure in a urologist’s or gynecologist’s office. However, this device has only been tested in the laboratory, not yet in animals or humans, and it has not been approved for sale by the FDA.  It is covered by 4 patents and a patent application.

Female urinary incontinence condition effects about 14 million women in the U.S., most of whom wear sanitary pads and don’t receive treatment, as surgery or injections of plastic or calcium granules, which can migrate, are presently the only options available to women to treat this condition.

We have to conduct animal studies to prove that it works before we will be able to attract Boston Scientific or another large company to conduct human studies, which will be expensive, and market the fiber when it is approved for sale by the FDA. This is a 2 to 3 year process. We have a pipeline of two additional products following behind this one, but each has a timeline based on what is required to obtain FDA approval.”

CEOCFO: Tell us about your management team & directors.
Dr. Loeb: “I founded the company in 1980. Glenn D. Yeik, our president and COO, has been with us 12 years, coming up through R&D. He developed our new side firing fiber that outperforms all of the other laser devices on the market, and he took it through the testing and the FDA process. He manages our manufacturing, R&D, product development, quality, purchasing and regulatory departments.

Brian T. Kenney, our VP of sales and marketing, has been employed by Trimedyne for 6 years. He appoints sales reps and distributors and teaches our laser procedures to them and our customers.

Jeffrey S. Rudner, our chief accounting officer, has been with us 5 years, very ably manages our accounting, accounts payable and receivables departments, and handles all of our SEC filings.

We have a very strong board of directors. In addition to myself and Glenn Yeik, our president, our directors include Donald Baker, who is the retired managing partner of Baker and McKenzie, the largest law firm in the world, Robert Crutchfield, vice president and general manager of pharmacy services of U.S. Oncology, Inc. and was formally senior vice president of Cardinal Health Inc. (NYSE: CAH), a $60 Billion company, and Richard  Horowitz, a partner in Heller Horowitz & Feit, our SEC counsel.”

CEOCFO: What is your financial condition?
Dr. Loeb: “At June 30, 2006, we had only $200,000 of long term debt, no bank debt, $1 million in cash and equivalents, receivables of $755,000 and $2,356,000 in inventories, versus payables and accrued expenses of only $804,000, which is normal for a company with $6.5 million of sales.

At June 30, 2006, we had 14.8 million shares of common stock outstanding on a fully diluted, weighted average basis.”

CEOCFO: Finally, why should people consider investing in Trimedyne?
Dr. Loeb: “We’ve shown that we can operate profitably. Very few companies in the medical field with sales of $6.5 million are profitable. With our new Laser Fiber, we believe Boston Scientific and Lumenis will replace many of the 1.2 million surgical procedures performed each year in the U.S. and overseas to treat enlarged prostates, a $720 million market, as they have the largest sales force in the urology field. We believe the success rates of our Laser Needle in the outpatient treatment of herniated or ruptured discs in the spine will, over time, replace many of the 1,000,000 surgical procedures performed each year in the U.S. and overseas to treat these conditions, another $600 million market. Most importantly, with our new prostate Fiber and powerful marketing partners, we’re on the verge of explosive growth!”

“This interview contains forward-looking statements as defined by the securities reform act of 1995, and these statements are subject to risks, uncertainties and unknown factors. Much of what we have said here is based on our current projections, estimates and expectations, which cannot be assured; and our results may differ materially from the statements made herein.”

“Investors can go to our website, www.trimedyne.com, for copies of our press releases, product information, financial statements and SEC filings, which will enable them to get up the learning curve on Trimedyne.”

“Thank you for inviting me to be with you today.  We appreciate having the opportunity to explain Trimedyne’s business and its potential to your viewers.”

disclaimers

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“We’ve shown that we can operate profitably. Very few companies in the medical field with sales of $6.5 million are profitable. With our new Laser Fiber, we believe Boston Scientific and Lumenis will replace many of the 1.2 million surgical procedures performed each year in the U.S. and overseas to treat enlarged prostates, a $720 million market, as they have the largest sales force in the urology field. We believe the success rates of our Laser Needle in the outpatient treatment of herniated or ruptured discs in the spine will, over time, replace many of the 1,000,000 surgical procedures performed each year in the U.S. and overseas to treat these conditions, another $600 million market. Most importantly, with our new prostate Fiber and powerful marketing partners, we’re on the verge of explosive growth!” - Marvin P. Loeb, Sc.D.